Q.4 What are Special Drawing Rights (SDRs) ?
Ans: The Special Drawing Rights (SDRs) as an international reserve asset or reserve money
in the international monetary system was established in 1969 with the objective of alleviating the problem of international liquidity. The IMF has two accounts of operation—the General Account and the Special Drawing Account. SDRs being costless, often called paper gold, is just a book entry in the Special Drawing Account of the IMF.
| Source : Original Website |
| Keywords: international reserve asset or reserve money, liquidity |
| Extra Info : The principal function of the IMF is to supervise the international monetary system. Several functions are derived from this. These are: granting of credit to member countries in the midst of temporary balance of payments deficits, surveillance over the monetary and exchange rate policy of member countries, issuing policy recommendations. |